Re: FTC -- In the Matter of Roaring Fork Valley Physicians I.P.A., Inc., a corporation.

[Guest guest]

,

How unfortunate. THe FTC is following a policy that suggests that physicainas in an IPA must make the practice of medicine more efficienct or improve outcomes. AN IPA cannot just negotiate for higher prices. Ridiculous but true. The improvement in efficiency has to be patient based and integrated between physicians. SO if you all are practicing solo and not truely woring together the FTC sees its role as antitrust.

Sorry,

To: ; practicemgt@...Sent: Fri, February 5, 2010 2:51:15 PMSubject: FTC -- In the Matter of Roaring Fork Valley Physicians I.P.A., Inc., a corporation.

Sigh, a thousand times, sigh.

Here is the recent news on the local IPA I belong to.

Check out the letters we have to send to insurances – they can basically chose to cancel our contracts immediately – and the IPA can’t help with renegotiating them.

Check out the free trade and liberty link with comments toward the bottom.

They point out that part of the reason the FTC came after us was a refusal to accept contracts that were a % of Medicare fees.

Locke, MD

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Roaring Fork, on behalf of its members, is prohibited from engaging in any collective contracting activities affecting rates in payer contracts. Roaring Fork is prohibited under the Order from:

(i) collectively refusing to accept proposed contracts for messengering with Medicare-based rates,

(ii) collectively asking payers to include a cost of living adjustment in the contract to be messengered, and

(iii) directing payers seeking information on the rates acceptable to members to look at collectively- negotiated I. P. A. contracts;

------------ --------- --------- --------- --

Other complaints regarding Medicare against the IPA:

15. The Bona Fide Offer Criteria states, among other things, that Respondent will not consider any Medicare-based proposal to be a bona fide offer. Respondent would not messenger offers with Medicare-based rates to its members because the offer did not meet the Bona Fide Offer Criteria. The Best Practices identify a cost of living increase (“COLAâ€) as a term that should be in Respondent’s payer contracts.

19. By adopting the ban on Medicare-based rates, Respondent and its members agreed to refuse to deal and refused to deal with any payer using Medicare-based rates in a

proposed contract. In a 2004 newsletter, Respondent told its members that it banned Medicare based rates because any physician who has Medicare-based rates in a payer contract would face “declining reimbursements.â€

24. Respondent also reinforced the concerted refusals to deal with payers except on its collectively agreed-upon terms by repeatedly reminding members in newsletters and other

documents that Medicare-based rates banned by the Bona Fide Offer Criteria would lead to declining reimbursement, and that Respondent’s role was to “keep [members] informed of best practices,†and the extent to which payers used its Best Practices in their contracts.

28. Respondent was highly effective in imposing the ban on Medicare-based rates and including the COLA term in payer contracts. None of Respondent’s current contracts has rates based on Medicare and all of its contracts have a COLA.

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28 just slays me – oh for goodness sakes – we have to accept a bad contract (% of Medicare) to avoid looking like we are breaking the law?

I thought accepting only good contracts was just good business.

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The complaint alleges that since at least 2003 RFV, although purporting to use a

messenger model, negotiated price-related terms on behalf of its members for the purpose of

increasing and maintaining the rates for services provided by RFV’s otherwise competing

physician members. RFV increased rates by demanding that payers include automatic annual

cost of living adjustments (COLAs) in their contracts. RFV held lengthy bargaining sessions with payers to pressure them into including COLAs and other terms in their contracts.

To protect the automatic increases, RFV refused to messenger contracts with Medicare-based rates because of their potential to decline. RFV feared Medicare-based rates would decline over time.

Perhaps the FTC hasn’t seen…

http://www.ama- assn.org/ ama1/pub/ upload/mm/ 380/cfhistory. pdf

www.oregon.gov/ OHPPR/OHREC/ Docs/.../ JeaneneSenComm03 _06.pdf

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http://www.ftc. gov/os/caselist/ 0610172/index. shtm

In the Matter of Roaring Fork Valley Physicians I.P.A., Inc., a corporation.

FTC File No. 061 0172

February 3, 2010

Agreement Containing Consent Order To Cease and Desist

Decision and Order

Complaint

Analysis of Agreement Containing Consent Order To Aid Public Comment

News Release

· For Release: 02/03/2010

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· Colorado Physicians Group Agrees to Stop Alleged Price-Fixing Tactics

· A Colorado physicians’ group has settled Federal Trade Commission charges of price-fixing by agreeing to halt its use of allegedly anticompetitive negotiating tactics against health insurers.The FTC charged Roaring Fork Valley Physicians I.P.A., Inc., which represents about 80 percent of the doctors in Garfield County, Colorado, with violating the FTC Act by orchestrating agreements among its members to set higher prices for medical services and to refuse to deal with insurers that did not meet its demands for higher rates.

· The FTC charged that Roaring Fork entered into these anticompetitive agreements between 2003 and 2006. According to the agency, the group’s doctors used the agreements to demand that contracts with insurers include a cost of living adjustment that automatically raised reimbursement rates every year. The group’s doctors also used the agreements to ban a cost-lowering provision commonly used by insurers that links reimbursement rates to Medicare rates. The group also discouraged its members from entering into individual contracts directly with insurers, the FTC charged, in order to enhance the bargaining power of the IPA. At the same time, Roaring Fork would accept contracts only if at least 80 percent of its

primary care physicians and 50 percent of its specialty doctors accepted the proposed contracts.

· According to the agency, the agreements raised the cost of physician services in Garfield County, without making the doctors’ practices more efficient in any way or improving the quality of care that patients received.

· The FTC settlement bars Roaring Fork doctors group from engaging in collective price negotiations and collectively refusing to deal with insurers. In addition, the group must:

· • Terminate any contracts with insurers that were reached using price-fixing tactics.

· • Notify the FTC before acting as an agent communicating contract offers and counter-offers between doctors and insurers.

· • Notify the FTC before participating in any collaborative arrangement with doctors and allow the agency to review and approve the details before implementing any such arrangement.

· The Commission vote to issue the administrative complaint and to place the consent order on the public record for comment and publish a copy in the Federal Register was 4-0. The Commission is accepting comments on the order for 30 days, until March 2, after which it will decide whether to make it final. Comments should be sent to: FTC Office of the Secretary, 600 Pennsylvania Ave., N.W., Washington, DC, 20580. Comments also can be submitted electronically at: https://public. commentworks. com/ftc/roaringf orkconsent.

· NOTE: The Commission issues a complaint when it has "reason to believe" that the law has been or is being violated, and it appears to the Commission that a proceeding is in the public interest. The issuance of a complaint is not a finding or ruling that the respondent has violated the law. A consent agreement is for settlement purposes only and does not constitute an admission of a law violation. When the Commission issues a consent order on a final basis, it carries the force of law with respect to future actions. Each violation of such an order may result in a civil penalty of up to $16,000.

· Copies of the complaint and consent order are available now on the FTC’s Web site and as a link to this press release. The FTC’s Bureau of Competition works with the Bureau of Economics to investigate alleged anticompetitive business practices and, when appropriate, recommends that the Commission take law enforcement action. To inform the Bureau about particular business practices, call , send an e-mail to antitrustftc (DOT) gov, or write to the Office of Policy and Coordination, Room 383, Bureau of

Competition, Federal Trade Commission, 600 Pennsylvania Ave, N.W., Washington, DC 20580. To learn more about the Bureau of Competition, read “Competition Counts†at http://www.ftc. gov/competitionc ounts.

· MEDIA CONTACT:

· KaplanOffice of Public Affairs

· STAFF CONTACT:

· Constance M. SalemiBureau of Competition

· (FTC File No. 061-0172)(RoaringFork)

============ ========= ========= ====

See Decision and Order…

To Members

Snip/snip

In order that you may readily understand the terms of the Order, we have set forth its

essential provisions and describe its application to Roaring Fork’s contracting activities,

although you must realize that the Order itself is controlling, rather than the following

explanation of its provisions.

(1) Roaring Fork, on behalf of its members, is prohibited from engaging in any collective

contracting activities affecting rates in payer contracts. Roaring Fork is prohibited under the

Order from:

(i) collectively refusing to accept proposed contracts for messengering with

Medicare-based rates,

(ii) collectively asking payers to include a cost of living adjustment in the contract

to be messengered, and

(iii) directing payers seeking information on the rates acceptable to members to

look at collectively- negotiated I. P. A. contracts;

The Order prohibits the adoption and enforcement of any new rule or guidance affecting the

rates of its members in payer contracts.

(2) Roaring Fork, with and on behalf of its members, is further prohibited from adopting

or implementing any rule or guideline or engaging in other conduct that promotes members’

collective refusals to deal with payers that do not conform to Roaring Fork’s bona fide offer

criteria, best practices or other contracting guidance. Examples of the prohibited conduct

include:

(i) the network adequacy rule stating that 80 percent of the members and 50

percent of the specialists must accept a contract before Roaring Fork agrees to

administer it; and

(ii) the rule preventing Roaring Fork from providing payers with the identity of

members who wish to contract with the payer.

(3) All Roaring Fork contracts currently in effect with payers must be canceled no later

than one year after the Order becomes final.

------------ --------- --------- --------- --

To Payor:

Snip/snip

Enclosed is a copy of a complaint and a consent order (“Order†) issued by the Federal

Trade Commission against Roaring Fork Valley Physicians I.P.A., Inc.(“Roaring Forkâ€).

Pursuant to Paragraph VII.B of the Order, Roaring Fork must allow you to terminate,

upon your written request, without any penalty or charge, any contracts with Roaring Fork that

are in effect as of the date you receive this letter.

If you do not make a written request to terminate the contract, Paragraph VII.B. further

provides that the contract will terminate on the earlier of the contract’s termination date, renewal

date (including any automatic renewal date), or anniversary date, which is [date].

You may, however, ask Roaring Fork to extend the contract beyond [date], the

termination, renewal, or anniversary date, to any date no later than [date], one (1) year after the

date the Order becomes final.

If you choose to extend the term of the contract, you may later terminate the contract at

any time.

Any request either to terminate or to extend the contract should be made in writing, and

sent to me at the following address: [address].

============ ========= ========= ===

http://www.modernph ysician.com/ article/20100203 /MODERNPHYSICIAN /302039967/ -1

FTC, Colo. doc group reach consent agreement

By Gregg BleschPosted: February 3, 2010 - 12:00 pm ET

The Federal Trade Commission reached a consent agreement with a Colorado independent practice association, whose negotiating tactics were said by the government to be illegal price-fixing.

The FTC contends that Roaring Fork Valley Physicians IPA, which according to the government represents about 80% of the doctors in Garfield County, Colo., negotiated with health plans on behalf of its otherwise competing members in ways that violate federal antitrust law. The allegations include that the association demanded annual cost-of-living adjustments; refused to share contracts with members if the rates were based on Medicare rates; refused to deal with payers that declined to go along with the collective terms; and required that at least 80% of the total membership and 50% in each specialty agree to contracts. The agreement does not constitute an admission of wrongdoing or concede the government’s version of the facts. A proposed order settling the matter calls for the association to cease negotiating with payers on physicians’ behalf. Roaring Fork Valley Physicians IPA could not be reached for

comment.

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http://7thspace. com/headlines/ 333795/colorado_ physicians_ group_agrees_ to_stop_alleged_ price_fixing_ tactics.html

Colorado Physicians Group Agrees to Stop Alleged Price-Fixing Tactics

A Colorado physicians’ group has settled Federal Trade Commission charges of price-fixing by agreeing to halt its use of allegedly anticompetitive negotiating tactics against health insurers. The FTC charged Roaring Fork Valley Physicians I.P.A ., Inc ., which represents about 80 percent of the doctors in Garfield County, Colorado, with violating the FTC Act by orchestrating agreements among its members to set higher prices for medical services and to refuse to deal with insurers that did not meet its demands for higher rates. The FTC charged that Roaring Fork entered into these anticompetitive agreements between 2003 and 2006. According to the agency, the group’s doctors used the agreements to demand that contracts with insurers include a cost of living adjustment that automatically raised reimbursement rates every year. The group’s doctors also used the agreements to ban a cost-lowering provision commonly used by

insurers that links reimbursement rates to Medicare rates. The group also discouraged its members from entering into individual contracts directly with insurers, the FTC charged, in order to enhance the bargaining power of the IPA. At the same time, Roaring Fork would accept contracts only if at least 80 percent of its primary care physicians and 50 percent of its specialty doctors accepted the proposed contracts. According to the agency, the agreements raised the cost of physician services in Garfield County, without making the doctors’ practices more efficient in any way or improving the quality of care that patients received. The FTC settlement bars Roaring Fork doctors group from engaging in collective price negotiations and collectively refusing to deal with insurers. In addition, the group must: • Terminate any contracts with insurers that were reached using price-fixing tactics. • Notify the FTC before acting

as an agent communicating contract offers and counter-offers between doctors and insurers. • Notify the FTC before participating in any collaborative arrangement with doctors and allow the agency to review and approve the details before implementing any such arrangement. The Commission vote to issue the administrative complaint and to place the consent order on the public record for comment and publish a copy in the Federal Register was 4-0. The Commission is accepting comments on the order for 30 days, until March 2, after which it will decide whether to make it final. Comments should be sent to: FTC Office of the Secretary, 600 Pennsylvania Ave ., N.W ., Washington, DC, 20580. Comments also can be submitted electronically at: https://public. commentworks. com/ftc/roaringf orkconsent. NOTE: The

Commission issues a complaint when it has "reason to believe" that the law has been or is being violated, and it appears to the Commission that a proceeding is in the public interest. The issuance of a complaint is not a finding or ruling that the respondent has violated the law. A consent agreement is for settlement purposes only and does not constitute an admission of a law violation. When the Commission issues a consent order on a final basis, it carries the force of law with respect to future actions. Each violation of such an order may result in a civil penalty of up to $16,000. Copies of the complaint and consent order are available now on the FTC’s Web site and as a link to this press release. The FTC’s Bureau of Competition works with the Bureau of Economics to investigate alleged anticompetitive business practices and, when appropriate, recommends that the Commission take law enforcement action. To inform the Bureau about particular

business practices, call , send an e-mail to antitrustftc (DOT) gov, or write to the Office of Policy and Coordination, Room 383, Bureau of Competition, Federal Trade Commission, 600 Pennsylvania Ave, N.W ., Washington, DC 20580. To learn more about the Bureau of Competition, read “Competition Counts†at http://www.ftc. gov/competitionc ounts. MEDIA CONTACT: Kaplan Office of Public Affairs STAFF CONTACT: Constance M. Salemi Bureau of Competition

============ ========= ========= ===

http://www.dotmed. com/news/ story/11568/

Colorado Physicians Group Settles With FTC Over Alleged Price-Fixing

February 05, 2010

by Astrid Fiano, DOTmed News Writer

The Federal Trade Commission has announced an agreement with a Colorado physicians group to settle charges of price-fixing, and to stop the group's alleged anti-competitive negotiating tactics against health insurers. The FTC charged Roaring Fork Valley Physicians I.P.A., Inc., (Roaring Fork) of Glenwood Springs, CO, (an independent practice association representing around 80 percent of physicians in Garfield County, CO), with violating the FTC Act. According to the FTC complaint, about 85 different competing independent physicians and physician practice groups acted through Roaring Fork, which orchestrated agreements to fix prices with payers offering services in the area. The agreements allegedly involved refusing to deal with payers except on collectively agreed-upon terms; and facilitating/ implementing agreements on price-related terms. The FTC said the terms included demanding that

contracts with insurers include a cost of living provision to raise reimbursement rates every year, and banning a commonly-used cost-lowering provision linking reimbursement rates to Medicare rates. The FTC alleged that the group's discouraging members from individually contracting with insurers significantly increased the bargaining power of the IPA. The activities resulted in unjustified increased consumer prices for physician services, the FTC said. The FTC settlement prohibits Roaring Fork from collective price negotiations and from collectively refusing to deal with insurers. Roaring Fork must also terminate any contracts with insurers that were reached using price-fixing tactics, notify the FTC before acting in an agent capacity to communicating contract offers between physicians and insurers, and have agency review and approval of participation in any collaborative arrangement with physicians. The FTC notes that issuance of a

complaint is not a finding or ruling that the respondent has violated the law, and a consent agreement does not constitute an admission of law violation. Adapted in part from a FTC press release. Read more details: http://www.ftc. gov/opa/2010/ 02/roaringfork. shtm http://www.ftc. gov/os/caselist/ 0610172/index. shtm

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http://blog. mises.org/ archives/ 011598.asp

Refusal to Price Fix = Price Fixing

February 3, 2010 11:34 AM by S.M. Oliva (Archive)

The Federal Trade Commission announced another gunpoint "settlement" today against a physician group. What distinguishes this case is the FTC now expressly states that refusal to accept federal Medicare price controls is itself a form of illegal price fixing.

Roaring Fork Valley Physicians, I.P.A., an 85-physician group in Colorado, faced the FTC's wrath because of its members' "concerted refusals to deal" with HMOs and other insurers that are protected like endangered species by federal antitrust officials. The FTC's complaint specifically cited the group's policy of not agreeing to rates based on the federal price controls set for Medicare:

In order to collectively maintain and increase rates, Respondent's members agreed to refuse and refused to enter into individual contracts with payers. The payers with whom Respondent's members refused to deal, included, but were not limited to, United Healthcare, CIGNA, Government Employee Hospital Association Inc., Humana Inc., and Anthem Blue Cross and Blue Shield. When approached by payers asking them to sign individual contracts, members often referred the payers to Respondent for contracting. For example, one member told Respondent that the payer's "contract agreements are filed in the local landfill. We will wait for them to go back to the IPA."

[ . . . ]

By adopting the ban on Medicare-based rates, Respondent and its members agreed to refuse to deal and refused to deal with any payer using Medicare-based rates in a proposed contract. In a 2004 newsletter, Respondent told its members that it banned Medicare-based rates because any physician who has Medicare-based rates in a payer contract would face "declining reimbursements."

So it's now illegal to simply refuse to sign a contract, because the buyer's "need" for a service outweighs the seller's right to control the disposition of their own labor. Remember, it's not illegal for a federally-recognize d labor union to coerce its members to work (or strike) under certain conditions, but it is illegal for a purely voluntary group to act out of shared self-interest.

But the main lesson here is that the FTC considers Medicare-based rates to be "market" prices -- and any price level above such rates is presumptively anti-competitive. Just imagine what the FTC will do to physicians if some form of Obamacare passes.

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Comments (9)

· Hard Rain

"You’re gouging on your prices if You charge more than the rest.But it’s unfair competitionIf you think you can charge less.

“A second point that we would makeTo help avoid confusion:Don’t try to charge the same amount:That would be collusion!"

From "Tom and his Incredible Bread Machine" by R.W. Grant

Published: February 3, 2010 2:17 PM

· vikingvista

The Medicare disaster had one release valve--people could choose not to use it, even if they could not choose to not pay for it. Increasingly, providers are making that choice. Now we see the beginnings of the state closing that valve.

Don't want to provide government care? Better get your self a good lawyer.

Published: February 3, 2010 6:31 PM

· nemo

Only option left, unfortunately, is to become a union.

Published: February 4, 2010 8:47 AM

· Iatros

Well it took 25 years longer, but '1984' is now here. If this is not Big Brother using Doublespeak, I don't know what is!

But wait, there's more! If a physician cannot refuse to sign Medicare contracts, how long before he cannot refuse to accept Medicare patients? How long next before he will be assigned hours and workplace locations? How long next until the young physician will be assigned specialties, with subspecialty slots severely limited and tightly controlled.

But wait, there's more! When Medicare/Medicaid finally becomes unsustainable, when medical care is universal but physicians are in short supply, the political pressures will be enormous to make physicians 'wards of the state'. At that point (soon, perhaps 15 years into boomer retirement), we will become captive prisoners of the state!

Hoo boy, am I glad to be one of the boomers set to retire, and leave the house of medicine.

Published: February 4, 2010 9:30 AM

· ny on the Spot

Collectively refusing to deal with certain customers or vendors is anti-competitive behavior. So the FTC, has a leg to stand on there.

However, this group of physicians should point to the fact that the test of the legality of what they are doing is: does it promote or suppress competition?(Chicago board of trade vs US 246 U.S. 231)

I believe they are promoting competition in the medical market.

Published: February 4, 2010 10:22 AM

· vineyarder

The big problem with this analysis is that Roaring Fork Valley Physicians is NOT a physician group practice, it is an IPA (Independant Practice Association) ; i.e. a collection of competing physicians. Since they are competitors, not partners, it is illegal of them to jointly set minimum rates.

The problem is that this IPA failed to comply with the rules for a messenger-model IPA; they agreed as a group to set a minimum floor for commercial contracts. The fact that the minimum that they set was Medicare rates in simply coincidental; they could have just as easily (and just as illegally) picked a specific dollar amount. The problem is that these were competing physicians, and they therefore cannot collectively agree on minimum rates that they will accept; in order to comply with the messenger model IPA regulations, they must each independently set their own rates and the IPA must not facilitate sharing of fee information among members of the IPA.

There is nothing in the ruling that prevents any individual physician, or any physician group practice, from refusing to accept Medicare rates from any commercial insurer; it simply enforces the laws that prevent competitors from working together to set prices.

Published: February 4, 2010 10:36 AM

· J. K. Oates

I believe the actions of the FTC violate the word and spirit of the XIII amendment to the Constitution. The FTC has become the Master of Medicine and allows it's minions to dictate to a class of citizens what their labor is worth and what they may charge. It is not unreasonable to believe that if they get by with this methodology others will follow but wonder if the legal profession might be included. It further seems to me that this becomes a means to deny full access to care by citizens of this country.

Published: February 4, 2010 3:47 PM

· mwalter

The anti-trust point is that the member physicians agreed to the IPA, in writing, not to negotiate individually with Medicare. They can agree to accept contracts through their IPA, but they have to still leave the door open for Medicare to try and contract with them as individual business entities, even if they never actually agree to or sign any of those individual contracts. If they had left that door open, they wouldn't be in violation.

Published: February 4, 2010 5:49 PM

· gebanks

Medicare based rates doesn't mean the rates are less than those of Medicare, it just means they are a fraction of Medicare. The fraction could be 2.0 and thus twice what Medicare pays. They are right, though, that if they base rates on what Medicare pays, if Medicare gets cut, then they all get to cut.

We don't have Medicare based rates here, but the rates are based on the RVU, which is a relative value (of work) unit. Medicare and Medicaid pay the lowest per RVU of anyone, but the insurance companies each have a rate per RVU not a fraction of what Medicare pays.

Published: February 4, 2010 6:10 PM

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